Mainland Chinese residents are taking advantage of a loophole in the Hong Kong Capital Investment Entrant Scheme (CIES) by moving to a foreign country before arriving in Hong Kong as a resident.

According to a report in the South China Morning Post, the scheme was started in 2003 to attract foreign investment to Hong Kong if the applicant was willing to invest HK$10 million(US$1.25 million) in the city. However, the scheme isn’t open to Chinese residents unless they are a permanent resident in another foreign country.

And for 9000 Chinese people, that country is Gambia, Africa’s smallest country. Gambia does not have any diplomatic ties with Beijing and doesn’t even recognize the PRC as a legitimate government.

It costs a little over HK$100,000 (US$12,000) to apply for Gambian residency, and no visit is required to the country. To date, just over 9,000 CIES applicants come from The Gambia, according to Hong Kong immigration figures, with only 309 mainland Chinese residents actually electing to live in the country.

Hong Kong is an attractive place for wealthy Chinese investors as it exempts them from tax in mainland China if they are away for more than 183 days.

The loophole is widely advertised by Hong Kong-based immigration consultants who offer citizenship in Guinea-Bissau, which has just under 3,000 Chinese residents.